KEY POINTS
- Eskom’s profit more than doubled to R30.3 billion in the year ended March 2026, marking its second consecutive profitable year.
- Improved power station performance and lower diesel use helped cut OCGT-related costs by R10.6 billion.
- Load shedding fell to just four days, but municipal debt rose to R119 billion and remains a major threat to Eskom’s financial recovery.
South Africa’s state-owned power utility Eskom has reported a sharp improvement in its financial performance, recording a R30.3 billion profit after tax for the financial year ended March 2026.
The result represents more than a doubling of the R14 billion profit recorded in the previous financial year and marks Eskom’s second consecutive year of profitability.
The utility attributed the stronger performance to improved power station reliability, tighter cost controls and reduced dependence on expensive emergency diesel generation.
Eskom chairman Mteto Nyati said the latest results demonstrate that the utility has moved beyond financial and operational stabilisation towards a broader transformation of the business.
The company’s improved generation performance allowed it to rely less on open-cycle gas turbines (OCGTs), which are typically used when additional electricity supply is urgently required but come at a high operating cost.
As a result, Eskom reduced spending on fuel and storage for its own OCGTs, as well as costs associated with independent power producer OCGTs, by R10.6 billion.
Despite a 6.2% decline in electricity sales volumes, Eskom’s revenue increased by 4.1%, largely supported by higher electricity tariffs.
The utility said the combination of stronger generation performance and cost discipline helped improve both its profitability and overall financial position.
More Money for Infrastructure
Eskom plans to use part of its improved financial position to increase investment in electricity infrastructure.
Its capital expenditure programme is expected to rise from about R45 billion in 2026 to more than R70 billion annually from 2029.
The investment will support several areas, including Eskom Green, electricity distribution, coal-fired power station reliability, and the expansion of the national transmission grid.
The utility said stronger cash generation provides greater capacity to fund infrastructure required to improve the reliability and long-term security of South Africa’s electricity system.
Eskom had R124.9 billion in cash and cash equivalents at the end of March, although R38 billion was subsequently used to settle bonds that matured in April.
Its debt securities and borrowings also declined from R356 billion at the end of March to approximately R320 billion by the end of June.
Despite the improved financial results, Eskom continues to face significant structural challenges.
One of the biggest concerns is the growing amount owed by municipalities. Municipal arrears increased by 17.9% to R111.6 billion by the end of the financial year and rose further to approximately R119 billion by June.
Eskom warned that municipal debt could reach as much as R358 billion by 2031 if decisive measures are not taken to address the problem.
The utility also received a qualified audit opinion concerning the completeness of irregular expenditure reported under the Public Finance Management Act.
However, Eskom said the qualification no longer relates to the accuracy of reported irregular expenditure or losses linked to criminal conduct.
Eskom’s improved operational performance was also reflected in South Africa’s electricity supply situation.
The utility recorded only four days of load shedding during the 2026 financial year, amounting to a total of 26 hours.
The reduction represents a significant improvement compared with the severe power shortages that have previously affected businesses, households and economic activity across South Africa.
Eskom said it will continue focusing on generation, transmission and distribution investment while strengthening its financial sustainability.
The latest results suggest that the utility’s turnaround strategy is beginning to deliver measurable financial and operational gains, although rising municipal debt, declining electricity demand and long-term infrastructure requirements remain major challenges.
